Is the euro/dollar pair correction over?

By 03/05/2021News

Gold  1773,185

EURUSD   1,2018

DJIA  33876,50

OIL.WTI  63,285

DAX   15151

We have previously drawn the attention of our subscribers to the following fact. At the beginning of this year a large number of experts were expecting strong movements of the Euro/Dollar pair. The optimists saw the level of 1.30. The pessimists thought that the first target would be reached at 1.10, and the second one would be the parity level.



Our view is that it could be exactly the opposite. The EUR/USD will not show strong movements and will move in a low corridor throughout the year.
Yes, fundamentally the USD should rise against the EURO. The reasons are threefold. On the one hand the US economy is recovering faster than the European economy. On the other hand the pandemic in the US will also end earlier. The third reason is the big difference in yields between U.S. and Eurozone bonds.
However, all of this is overshadowed by the fact that the US government continues to print huge amounts of money. Yes, central banks all over the world are printing it, but not as much as Americans.
As a result the Euro/Dollar pair simply can’t go far in one or the other direction. Right now, judging by Friday’s red candlestick, the upward movement is fading. You might expect a sideways move or a drop below 1.20.

The optimal solution for the rest of the year might be to trade in a corridor. We buy on the lows and sell on the highs. However, we also need to consider swaps. If we enter trades with small orders + averaging, the more correct strategy looks like this. Only selling the EUR/USD pair and waiting for a few figures to make a profit.

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